Taurus MF files offer document with SEBI to launch Taurus FMP 180 Days Series 1

Taurus Mutual Fund has filed an offer document with Securities and Exchange Board of India (SEBI) to introduce Taurus Fixed Maturity Plan (FMP) 180 Days Series 1. The scheme is a close ended debt scheme. The new fund offer (NFO) price for the scheme is Rs10 per unit. The investment objective is to generate income through investments in debt and money market instruments maturing before the maturity of the scheme. The scheme offers two options - growth option and dividend option. The scheme would allocate up to 100% of assets in debt securities and money market instruments with low to medium risk profile. The minimum application amount is Rs10,000 and in multiples of Rs10 thereafter. The fund seeks to collect a minimum subscription amount of Rs1 crore under the scheme during the NFO period. Entry and exit load charge will be nil for the schemes. Benchmark Index for the scheme is Crisil Short Term Bond Fund Index.

Reliance MF floats Reliance Fixed Horizon Fund-XV-Series 2

Reliance Mutual Fund has launched Reliance Fixed Horizon Fund-XV-Series 2. The scheme is a close ended income scheme. It opens on 27th July and closes on 28 July 2010. The scheme offers two options - growth and dividend payout. There is no entry and exit load charge. The new fund offer price (NFO) for the scheme is Rs10 per unit and the minimum amount for subscription is Rs5,000. The investment objective of the scheme is to generate regular returns and growth of capital by investing in a diversified portfolio of central and state government securities and other fixed income/debt securities normally maturing with the time profile of the scheme. Benchmark Index for the scheme is CRISIL Liquid Fund Index.

MFs ask SEBI to delay new valuation norms

Mutual fund houses have asked the Securities and Exchange Board of India (SEBI) to reduce the impact of a possible increase in interest rates by the Reserve Bank of India (RBI). The fund houses have asked SEBI to delay the implementation of strict rules for valuation of securities. The new rules are schedule to come into effect next month. According to fund managers, increase in interest rates cause bond prices to fall, the new valuation rules will bring down the net asset value (NAV) of many schemes. The new valuation norms state that all money market and debt instruments with maturity of 90 days and above will have to be mark-to-market while computing NAVs. So, a fall in the traded price of instruments of 90 days and above will immediately lead to lower NAVs. The development indicates that many mutual funds, particularly that are aggressive on debt schemes, are holding substantial amounts of papers that will mature in 90 days or more. While these securities generate higher returns than those below 90 days maturity, they are more volatile as volatility typically increases with duration.

AMFI to introduce know-your-distributor norms from 1st August

The Association of Mutual Funds in India (AMFI) plans to introduce know-your-distributor (KYD) norms for mutual fund distributors with effect from 1st August for all the entities who plan to start marketing of mutual fund products and ARN (agent registration number) holders.